What happens if a dealer fails to maintain a required surety bond?

A dealer failing to maintain a required surety bond may incur fines and violations because the surety bond serves as a protective financial instrument that guarantees compliance with state regulations. This bond is essential for ensuring that the dealer follows the laws governing the sale of used cars, which may include consumer protection measures, payment of taxes, and adherence to fair business practices. If the bond is not maintained, it signifies noncompliance with these regulations, leading to potential fines imposed by the state and other regulatory bodies as a way to enforce compliance and safeguard consumers.

Continuing operations without penalties would contradict the purpose of the surety bond, while immediate closure of the dealership represents a more severe consequence that depends on specific state laws and regulations. Applying for a waiver is also not a typical remedy for failing to maintain a bond, as it does not convey the necessary assurance to protect transactions or consumers in the automotive market. The correct route upon such a failure is likely a financial penalty to incentivize compliance rather than a waiver or allowing operations to continue without accountability.